over the debt ceiling. you can have the last word on-line. and msnbc's coverage continues right now. good evening from new york. the president is about to address the nation on the ongoing negotiations and stalemate over the debt ceiling increase that's being proposed in washington. president obama is expected to speak for about 10 to 15 minutes. he will surely seek to reassure the country, reassure financial markets that the debt ceiling must be raised and somehow will be raised by the august 2nd deadline.

i will be joined by tea party freshman republican congressman joe walsh. president obama tonight will likely reiterate his position that he has taken in these negotiations. including thiz politically sensitive offer revealed last week to make changes to medicare and social security in, change for a republican compromise on an increase in government revenue. here now the president of the united states. >> good evening. tonight i want to talk about the debate we have been having in washington over the national debt. a debate that directly affects

of lives of all americans. we spent more than we take in. in 2000, the government had a budget surplus. but instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts while two wars an an expensive prescription drug program were added to our nation's credit card. as a result, the deficit was on track to top $1 trillion the year i took office. to make matters worse, the recession meant less money was coming in and required us to spend even more on tax cuts for middle class families to spur the economy, on unemployment insurance, on aid to states so we could prevent for teachers, police officers and firefighters from being laid off. these emergency steps also added to the deficit. now every family knows a little credit card debt is manageable, but if we stay on the current

path, our growing debt could cost us jobs and do serious damage to the economy. more of our tax dollars will go to paying off the interest on our loans. businesses will be less likely to open up shop and hire workers in a country that can't balance its books. interest rates could climb for everyone who borrows money. the homeowner with the mortgage, the student with a college loan, the corner store that wants to expand. and we won't have enough money to make job creating investments in things like education and infrastructure, or pay for vital programs like medicare and medicaid. because neither party is blamelesser in decisions that led to this problem, both parties have a responsibleability to solve it. over the last several month that's what we have been trying to do. i don't bore you with the details of every plan or proposal but basically the debate centered around two different approaches. the first approach says, let's

live within our means by making serious, historic cuts in government spending. let's cut domestic spending to the lowest level it's been since dwight eisenhower was president. cut defense spending at the pentagon by hundreds of billions of dollars. let's cut out waste and fraud and health care programs like medicare and at the same time make modest adjustment so medicare is there for future generations. finally, let's ask the wealthiest americans, and biggest corporations to give up some of their breaks in the tax code in special deductions. this balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. it would reduce the deficit by around $4 trillion and put 0 us on a path to pay down our debt and the cuts wouldn't happen to abruptly they would be a drag on our economy or prevent us from helpening small businesses and middle class families get on

their feet right now. it is also bipartisan. while many in my own party aren't happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. while republicans might like to see deeper cuts and no revenue at all, there are many in the senate who have said yes, i'm willing to put politics aside and consider this approach because i care about solving the problem. and to his credit, this is the kind of approach the republican speaker of the house, john boehner, was working on with me over the last several weeks. the only reason this balanced approach isn't on its way to becoming law right now is because a significant number of republicans in congress are insisting on a different approach, a cuts-only approach. an approach that doesn't ask the wealthiest americans or biggest corporations to contribute anything at all. and because nothing is asked of those at the top of the income

scale, such an approach would close the deficit only with more severe cuts to programs we all care about, cuts that place a greater burden on working families. so the debate isn't whether we need to make tough choices. democrats and republicans agree on the am of deficit reduction we need. the debate is about how it should be done. most americans, regardless of political party, don't understand how we can ask a senior citizen to the pay more for her medicare before we ask a corporate jet owner or oil companies to give up tax breaks that other companies don't get. how can we ask a student to pay more for college before we ask hedge fund managers to stop pa paying taxes at a lower rate than their secretaries. how can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?

that's not right. it's not fair. we all want a government that lives within its means, but there's still things we need to pay for as a country, things like new roads and bridges, weather satellites and food inspection, services to veterans and medical research. keep in mind under a balanced approach, 98% of americans who make under $250,000, would see no tax increases at all. none. in fact, i want to extend the payroll tax cut for working families. what we're talking about under a balanced approach is asking americans whose incomes have gone up the most over the last decade, millionaires and billionaires, to share in the sacrifice everyone else has to make. and i think these patriotic americans are willing to pitch in. in fact, over the last few decades, they've pitched in every time we passed a bipartisan deal to reduce the deficit. the first time a deal was

passed, a predecessor of mine made the case for a balanced approach by saying this, would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their share or would you accept larger deficits, higher interest rates, and higher unemployment, and i think i know your answer. those words were spoken by ronald reagan. but today many republicans in the house refuse to consider this kind of balanced approach, an approach pursued not only by president reagan, but by the first president bush, by president clinton, by myself, and by many democrats and republicans in the united states senate. so, we're left with a stalemate. now, what makes today's stalemate so dangerous is that it has been tied to something known as the debt ceiling, a term that most people outside of washington have never heard of before.

understand, raising the debt ceiling does not allow congress to spend more money, it simply gives our country the ability to pay the bills that congress has already racked up. in the past, raising the debt ceiling was routine. since the 1950s, congress has always passed it, and every president has signed it. president reagan did it 18 times. george w. bush did it seven times, and we have to do it by next tuesday, august 2nd, or else we won't be able to pay all of our bills. unfortunately, for the past several weeks, republican house members have essentially said that the only way they'll vote to prevent america's first-ever default is if the rest of us agree to their deep spending cuts-only approach. if that happens and we default, we would not have enough money to pay all of our bills, bills that include monthly social security checks, veterans

benefits, and the government contracts we've signed with thousands of businesses. for the first time in history, our country's aaa credit rating would be downgraded, leaving investors around the world to wonder whether the united states is still a good bet. interest rates would skyrocket on credit cards, on mortgages, and on car loans, which amounts to a huge tax hike on the american people. we would risk sparking a deep economic crisis. this one caused almost entirely by washington. so defaulting on our obligations is a reckless and irresponsible outcome to this debate, and republican leaders say they agree we must avoid default, but the new approach that speaker boehner unveiled today which would temporarily extend the debt ceiling in exchange for spending cuts, would force us,

once again, to face the threat of default just six months from now. in other words, it doesn't solve the problem. first of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all americans would have to pay as a result. we know what we have to do to reduce our deficits. there's no point in putting the economy at risk by kicking the can further down the road. but there's an even greater danger to this approach. based on what we've seen these past few weeks, we know what to expect six months from now. the house of representatives will again refuse to spend unless we do the cuts only approach. again, they will refuse to ask the wealthiest americans to give up their tax cuts for deductions. again, they will demand harsh cuts to programs like medicare, and once again the economy will be held captive unless they get their way.

this is no way to run the greatest country on earth. it's a dangerous game that we've never played before, and we can't afford to play it now. not when the jobs and livelihoods of so many families are at stake. we can't allow the american people to become collateral damage to washington's political warfare. congress now has one week left to act, and they are still pass forward. the senate has introduced a plan to reduce default which ensures we don't have to go through this again in six months. i think that's a much better approach, although serious debt reduction would still allow us to cut entitlement and tax reform. either way, i've told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of congress and a compromise that i can sign. i'm confident we can reach this compromise.

despite our disagreements, republican leaders and i have found common ground before, and i believe that enough members of both parties will ultimately put politics aside and help us make progress. now, i realize that a lot of the new members of congress and i don't see eye-to-eye on many issues, but we were each elected by some of the same americans for some of the same reasons. yes, many want government to start living within its means and many are fed up with a system in which the deck seems stacked against middle class americans, in favor of the wealthiest few. but you know what people are fed up with most of all? they are fed up with a town where compromise has become a dirty word. they work all day long, many of them scraping by, just to put food on the table, and when these americans come home at night, bone tired and turn on

the news, all they see is the same partisan three-ring circus here in washington. they see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary americans. they are offended by that, and they should be. the american people may have voted for divided government, but they didn't vote for a dysfunctional government. so i'm asking you all to make your voice heard. if you want a balanced approach to reducing the deficit, let your member of congress know. if you believe we can solve this problem through compromise, send that message. america, after all, has always been a grand experiment in compromise. as a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test the proposition at the heart of our founding that out of many, we are one.

we've engaged in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that jefferson once wrote, every man cannot have his way in all things. without this mutual disposition, we are disjointed individuals, but not a society. history is scattered with the stories of those who help fast to rigid ideologies and refuse to listen to those who disagreed, but those are not the americans we remember. we remember the americans who put country above self and set personal grievances aside for the greater good. we remember the americans who held this country together during its most difficult hours, who put aside pride and party to form a more perfect union. that's who we remember. that's who we need to be right now.

the entire world is watching, so let's seize this moment to show why the united states of america is still the greatest nation on earth. not just because we can still keep our word and meet our obligations, but because we can still come together as one nation. thank you. god bless you, and may god bless the united states of america. >> that was the president speaking from the east room in the white house. two minutes from now we will be taking you to the ceremonial office of the speaker of the house, just off the floor of the house of representatives for a statement by speaker john boehner of ohio in response to the president's remarks. the president did not make any new news tonight in the speech, he began with an outline of the deficit history, our current

deficit history and how we got to here. how he entered office with a deficit of over a trillion dollars, it has now risen. he said it's the responsibility of both parties to solve that deficit, and he outlined his balanced approach, his balanced approach being one of spending cuts and tax revenue increases and then made the case for his balanced approach. ending with a pitch, in effect, to viewers and listeners to if you agree with his balanced approach, please, let congress know. ultimately, that was the only action the president suggested taking, that anyone take, coming out of this speech, is that viewers who support his position on the balanced approach that includes tax revenue increases should let washington know. he pointed out that many republicans in the senate have come to the agreement that we need the balanced approach that includes tax revenue increases, and then said that the only reason, the only reason that we

are stuck is because of a faction in the republican house of representatives that seemingly will not compromise on anything. he's pointed out that speaker boehner had come to a personal agreement with the president that the balanced approach, that included tax revenue, was something that could be done. in a compromise. he quoted thomas jefferson towards the end of the speech on the matter of compromise, since this is a speech seeking compromise, every man cannot have his way in all things. the speaker is expected to speak for approximately six to seven minutes. here he is now. >> good evening. i'm john boehner. i serve as speaker of the whole house, of the members of both parties that you elect. these are difficult times in the life of our nation. millions are looking for work and have been for some time and and the spending binge going on

in washington is part of the reason why. before i served in congress, i ran a small business in ohio. i was amazed at how different washington, d.c. operated than every other business in america, where most american businesses make the hard choices of paying their bills and living within their means, in washington, more spending and more debt is business as usual. i've got news for washington, those days are over. president obama came to congress in january and requested business as usual. he had another routine increase in the national debt, but we in the house said not so fast. he was a president asking for the largest debt increase in history on the heels of the largest spending binge in history. here's what we got from that massive spending binge, a new health care bill most americans didn't ask for, a new spending bill that's more useful for producing material for late night comedians than jobs, and a national debt that is so out of

hand that it sparked a crisis without press dment my lifetime or yours. the united states cannot default on its debt limitations. what we told the president in january was this, the american people would not accept a debt limit without spending cuts and reforms. over the last six months, we've done our best to convince the president to partner with us, to do something dramatic to change the fiscal trajectory of our country, something that will boost confidence in our economy. renew a measure of faith in our government, help small businesses get back on track. last week the house passed such a plan and with bipartisan support. it's called the cut, cap, and balance. it cuts and caps government spending and pays the way for a balanced budget amendment for the constitution, which we believe is the best way to stop washington from spending money it doesn't have. before we even passed the bill in the house, the president said he'd veto it.

i want you to know i worked to identify a path forward to implement the principles of cut, cap, and balance in a manner that could secure bipartisan support and be signed into law. i tell you, i gave it my all. unfortunately, the president would not take yes for an answer. even when we thought we might be close to an agreement, the president's demands changed. the president has often said we need a balanced approach, which in washington means, we spend more and you pay more. having run a small business, i know those tax increases will destroy jobs. the president is adamant that we cannot make fundamental changes to our entitlement programs. as the father of two daughters i know these programs won't be there for them and their kids unless significant action is taken now and the sad truth is the president wanted a blank check six months ago and he wants a blank check today. this is just not going to happen. you see, there's no stalemate

here in congress. the house passed a bill to raise the debt limit with bipartisan support. and this week, while the senate is struggling to pass a bill with phony accounting and washington gimmicks we're going to pass another bill, one developed with the support of the bipartisan leadership of the u.s. senate. obviously, i expect that bill can and will pass the senate and be sent to the president for signature. if the president signs it, the crisis atmosphere that he's created will simply disappear. the debt limit will be raised. spending will be cut by $1 trillion and a bipartisan committee of the congress will begin the hard but necessary work dealing with the tough challenges our nation faces them individuals doing this work will not be outsiders but elected representatives of the people, doing the job they were elected to do as outlined in the constitution. those decisions should be made based on how they are going to affect people who are struggling to get a job, not how they will

affect some politicians chances of getting re-elected. this debate isn't about president obama and house republicans. it isn't about congress and the white house with. it's about what standing between the american people and the future we seek for ourselves and our families. you know, i've always believed the bigger the government, the smaller the people. and right now we have a government so big and so expensive it is zapping the drive out of our people and keeping our economy from running at full capacity. the solution to this crisis is not complicated. if you are spending more than you are taking in, you need to spend less of it. there's no symptom of government more menacing than our debt. break its grip and we begin to liberate our economy and our future. we're up to the task. and i hope president obama will join us in this work. god blets you and your family and god bless the united states of america. >> that was speaker of the house

john boehner responding to the speak address of the president of the united states. called a stalemate over the debt ceiling negotiations. speaker boehnor said there was no stalemate, making the case that there was no stalemate simply because he has been able to pass some bills in the house of representatives only that address this with absolutely no possibility of passing that legislation through the united states senate. ignoring the stalemate, he ignored many of the specifics raised by the president in the president's address. to consider both of these speeches, joining me now, the host of msnbc's "hardball," chris matthews and msnbc contributor melissa harris-perry. chris, your reaction to first the president's speech. >> well, i thought the president used a couple of words, fair and balance, fox commercial, interesting, fair, then balance, then fair and balance over and over again to make a case for his position. i thought he came off as the good mother in the old testament story of king solomon who was willing to give the baby to the

other mother, rather than having it killed. where the dishonest mother was willing to kill the baby rather than letting the other have it. i think he's leaning towards compromise and the republicans are leaning against compromise. there was a dishonest statement by speaker boehner who i think is normally straight talk. i don't know who wrote the speech tonight. there was no bipartisan action by the congress on the republican proposal. that vote in the house i believe was 234 votes for the passage of the cut, cap and balance bill. and only five democrats within that 234, which wasn't up to the level of republican support in the house. that was no bipartisan bill. i don't know who's writing this stuff. we had a senator on today on "hardball" who said the same thing. must be some, rncc or somebody, but it's not the truth and wrong for the speaker of the house to say something that's not true. there was no passage of a bipartisan or debt ceiling increase measure at all.

he shouldn't have said that, i think it taints the whole statement. >> melissa, the speaker did not address the way the president singled him out in his speech, in the president's speech to say that speaker john boehner was one of the republicans who was willing to agree to a balanced approach, what the president called abalanced approach, one that includes some tax revenue increases and the speaker did not answer this question that the president asked in his speech, based on that balanced approach. how can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. >> absolutely. look, i have to say it was a little upset or stressed out listening to the president's speech because when he first started to describe the first approach. he said there are two approaches and he started to describe the first approach and i thought he

was describing a republican approach. it was cut, cut, cut and i thought he is saying things about the other side and then i realize, oh, no, that's what the president is advocating all of these cuts but i was taking a deep breath and the fact he is he gave boehner a lot of cover here. he said he is a reasonable guy. there is a portion of the republican party that wants to do the right thing here. we want to find a way to cut these things. we have an understanding that entitlements will have to be reformed and so let's try to move forward. when boehner comes on behind that and says a number of things that were dishonest and not responding in any kind of honest way to this reality of the need to raise revenues by asking people to pay their fair share. he says, look, i'm the father of two daughters. i'm the daughter of a mother who relies on social security and the fact is i know both of these speeches were meant to soothe the markets but i'm worried about soothing the anxieties of

american citizens who right now are worried they are not going to have their most basic needs taken care of because they are fighting in washington at this point over something that is not real. this is not a real crisis. it can be solved this hour if they decided to. >> chris, i was surprised that the president did not make news. here's the president coming out and asking for network time in the middle of something that we've never had before, which is correctly put by him a stalemate over raising the debt ceiling. i understand he had to teach some basic things about this to the general public, but he doesn't get another chance at this, does he? the national address over the stalemate on the debt ceiling, if he was going to make news about it, wouldn't he have had to do it here? >> i think there is concern in the media about that. he asked for time in primetime to go on national television. usually presidents only ask for that when they want to make an

announcement, to make news. he openly stated this is a debate he's engaged in not a news making event. i think that's why the network chose to give the opposition its turn. it put the president on an equal level you see the advantages of the white house press corps and the operation. speaker boehner, once again, it was a slim shot operation by the republicans. he was looking off north by northwest or somewhere, at something in the air. i'm not sure what, but it wasn't the normal sort of presentation where you look at the camera. and by the way, i don't know why they keep immitating the president by putting a podium up and acting like they are addressing the nation like they are the president. they would be better off doing what nixon did years ago with the speech, stand by a desk with an average person and put his butt against the desk and talk like a regular person to regular people. and they pretend there is some

counter bully pulpit when they are not that. i think both sides blew it in terms of format. the president shouldn't have gone on national television to do a political address and i don't think the other side did much to match it. >> the president had to educate the public who's not paying attention to every word and doing a minor sampling of the debate going forward that there is something important at stake here. he said, it's a dangerous game that we've never played before. he did everything he could, it seems to me, to get the uninitiated out there to understand the stakes involved in raising the debt ceiling. >> sure. look, his talking points were, this is george wchl bush's debt, this is his kred cart card. these were the bad choices made in the previous administration that we are paying for. his second point, it is not all of the opposition which is the problem. it is this right wing faction represented by the tea party, who are being unreasonable and

acting like freshmen, frankly, who are not taking seriously their responsibility relative to the country. here's the problem. every element of this that is technical, that is about how much, that is about how long, all of that gets washed away in one big reality that the american public walks away from after these 20 minutes, and it is that washington is broken. that the people, whom we pay -- we talk about the government's too big, but the main vision of government we have, other than dmv bureaucrats are these guys in washington, talking to us. and the more that the president helps to create the idea that it is broken, and he simply helps to create the idea it is broken by spending network, primetime doing this, it actually benefits the gop. because the gop more than anything else is simply saying government doesn't work. it can't solve your problems.

there's nothing about it that will lead us to job creation. the president said at one point, people are working hard a all day and they are not paying attention. people wish they were working hard all day. i think the issue is the more it looks broken and infighting the better it serves the other side. >> thank you. thank you both for joining me. >> thank you, lawrence. coming up, chris' favorite debating partner, joe walsh with the tea party reaction to both president and speaker boehner's speeches. and later, white house adviser joins us.

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the only reason this balanced approach isn't on its

way to becoming law right now is because a significant number of republicans in congress are insisting on a different approach, a cuts-only approach, an approach that doesn't ask the wealthiest americans are biggest corporations to contribute anything at all. >> that was the president addressing the nation just minutes ago, this is our special msnbc live coverage of the president's address and the response to the president's address by house speaker john boehner. joining me now, republican congressman and tea party caucus member, joe walsh, thank you very much for joining me tonight, congressman. >> great to be with you, lawrence. >> congressman, the president said we're left with a stalemate, john boehner said there is no stalemate. how could the speaker say there is no stalemate? >> there is a stalemate, and again, it should come as no surprise that i was disappointed in the president's speech, but let me -- let me comment directly upon it. it was interesting, he mentioned the two approaches, and i agree with him on this, most of the republican caucus does believe we need to cut spending. pure and simple. and the biggest disappointment, lawrence, i had in this speech

was i don't think the president knows where large swaths of the american people are. i held three town halls this weekend, probably 400 to 500 people, and i would poll everybody in these town halls, and lawrence, i come from a swing district, and by far the option that most americans wanted, and it wasn't heck no, don't raise the debt ceiling, it was we know we have to raise it, but cut spending and reform the way washington spends so we never get here again. i think that's where most americans are, and i think that's why they sent us to washington. >> well, congressman, i can't argue with you on the views of your district, and certainly they must have views similar to yours because they voted for you, but we have polling a clear majority of not just all americans, not just democrats, but a clear majority of republican voters nationwide approve of the president's balanced approach that includes

tax revenue increases through closing of egregious loop holes and other adjustments in the tax code. let's not debate what the american people want. the question is where do we go from here? let me ask you this question, would you rather reduce deficits and interest rates by raising revenue from people who are not paying their fair share like hedge fund managers that pay less than their secretaries or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? >> lawrence, again, a false choice, but it's an interesting one. >> congressman, i want to stop you. when you consider your answer to this, that is the question that president obama quoted in his speech, which was asked by ronald reagan, the single most important hero of the republican party, ronald reagan said he would rather increase tax revenues where they could in order to solve these kinds of

problems. >> lawrence, it always slays me when this president quotes ronald reagan. >> because he agrees with ronald reagan, congressman, and you don't. >> those two presidents, lawrence, had two enormously different visions of this country. one president, president reagan, lawrence, got government out of the way and off the backs of the american people, and we enjoyed a 20 to 30 year growth period. this president, lawrence, respectful ly, has put government on the backs of people. the american people are suffocating throughout, lawrence. you talk about the wealthy, the top 5% of the people in this country pay 60% of the taxes for the first time in our history we have 51% of the american people that aren't paying any income taxes. lawrence, our government is too big. we have a government that spends too much, and we're bankrupting future generations, and we're not going to change that until we change this town.

>> congressman walsh, you know that the government got bigger every year under the reagan presidency, so much bigger every year under the reagan presidency that ronald reagan had to ask you in congress, you weren't there, but congress, he had to ask congress for a debt ceiling increase 18 times, and congress gave him a debt ceiling increase 18 times. would you have voted no on every one of the 18 ronald reagan debt ceiling increases? >> lawrence, i'll give you an honest answer, i don't know. what's interesting to me is -- >> so there might have been a debt ceiling increase you might have voted for, just not a obama debt ceiling increase. >> no, no, no. 20 to 30 years ago, who knows. what i find interesting -- you're right in your history, why is the debt ceiling such a big issue now? and i guess my answer would be is because the crisis is so big, one, this president for six months has ignored the problem, two, and the american people sent people to washington to no

longer give this city a blank check. i would argue the american people finally woke up. you keep talking about this tea party movement, lawrence, i think that movement is a lot bigger than your profession -- or actually, either party understands. >> i'm going to put congressman joe walsh as a maybe for voting for the reagan debt ceiling increases. congressman joe walsh, thank you very much for joining me tonight. >> thank you, lawrence. >> coming up, senior white house advisor david plouffe joins me from the white house. somewhere in america, there's a doctor who can peer into the future. there's a nurse who can access in an instant every patient's past. and because the whole hospital's working together, there's a family who can breathe easy, right now. somewhere in america, we've already answered some of the nation's toughest healthcare questions. and the over 60,000 people of siemens

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the new approach that speaker boehnor unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. in other words, it doesn't solve the problem. we can't allow the american people to become collateral

damage to washington's political warfare. >> that was the president addressing the nation from the east room, beginning just 45 minutes ago, he spoke for about 20 minutes, explaining the current stalemate, what he called a stalemate, in the debt ceiling negotiations. joining me now, senior white house advisor, david plouffe. thanks for joining me tonight. >> thanks for having me. >> can you trace for us how the administration went from at the beginning of the year, tim geithner, jack lew, asking for a clean debt ceiling increase, the kind we used to do all the time, a one-page bill that changed a number in law to this point where the president has been through negotiations on a variety of very big deficit reduction bills of unprecedented size, including those with the tax revenue and now the one today that he's endorsed with harry reid that does not include tax revenue. how does it get from a clean bill to let's do these kind of

giant reduction bills attached to a debt ceiling? >> we've always maintained we didn't think the debt ceiling should be held hostage. the president is committed to debt reduction. he thinks it is important to our economy. the president believes it's important for our economy. the numbers don't lie. if we don't begin to live within our means and significantly cut the deficit in the not too distant future, we won't have money for things like college loans, medical research, kids health care, so we have to get our fiscal house in order so that we obviously reduce the deficit and leave a better fiscal situation for future generations, but also so we have the ability to create things that will be good for our citizens. >> the president seems to be keep moving to whatever the new legislative reality is. if something gets ruled out as impossible, he moves to something that looks more possible than whatever became impossible.

here was speaker boehner coming out responding to the president saying let's do cut, cap and balance. i mean, that's going backwards. they are moving backwards in these negotiations. >> well, listen, the president, as you mentioned, was working with speaker boehner to try to do a deficit reduction package that was balanced. it had revenue and tough spending cuts, but ones we thought the country could live with. that was our preferred approach. that broke down them speaker walked away from that and now we have a stalemate and the president said of the options in front of us, senator reid's option is the best to get through the default crisis. we have a lot of work to do on the deficit still. there was report that came out on your competitor, cnn, that, you know, one of the rating agencies is saying if the boehner plan is passed it means a downgrade. so that means a tax increase for just about every american and higher interest rates.

so as the president said that doesn't solve the problem. we feed to do the smart thing in the short term here to make sure we don't default and don't have this hanging over our economy five or six months from now and get to the serious work of deficit reduction, which is going to require smart, entitlement reform and tax reform. the republican approach -- listen, six months from now we know what will happen. if they get their way, the committee congress is setting up will hopefully work something out but in they don't, if that committee stalemates they will say here's the $1.8 million in spending cuts and basically enshrine the paul ryan budget in to law and we're not going to sign up for that. over the next few days what we need are politicians in washington to compromise a bit, particularly house republicans. that's the only way we will get out of the imsglass the president identified speaker boehner as one of the republicans. he mentioned republican senators

not by name but speaker boehner basically as one of the republicans who was willing to reach some kind of compromise that would include tax revenue increases, what the president calls the balanced approach. i didn't hear the speaker proudly announcing to the american people that he was being so flexible in the negotiations. that he was willing to come to some kind of agreement with the president on that. was that an attempt to politically isolate the speaker from his colleagues in the house of representatives? >> no, it wasn't. i think the speaker -- i think the president wanted to make clear to the american people that despite our disagreements we have been able to find common ground and with the speaker we tried to find common ground on the deficit. i think his caucus, that's a tough sell. i think had we marched forward we would have marched the votes for it. pu putting enough republicans and democrats to get enough votes but you have republicans of all ideological spectrums saying they would be in support of a balanced approach. that's what we need to do in the

short and long term. >> that's all the time we have for tonight. i want to congratulate on your moment participating in a moment

so in some strange way the two aren't so far apart. it's that they can't bridge the final gap so now that that broke apart he's arguing for constitutional balanced budget amendments and no tax increases at all but obama is held to that same deal and continue to offer

it to boehner. >> let's listen to what the president said about the unwillingness to promise. >> i realize that the new members of congress don't see eye to eye but we were each elected for the same reason. yes, many want government to start living within its mines and many are fed up with a system in which the deck seemed stack against middle class americans in favor of the wealthiest few but do you know what people are fed up with most of all, they're fed up with a town where compromise has become a dirty word. >> howard, he never said the words tea party. he kept saying new members of congress. i wonder who he was talking about. >> i don't know why he didn't come out and say it. first of all, i want to say with "the huffington post," we're reporting many of the websites

in congress, they're down, apparently because of traffic because the president said at one point, you know, let your member of congress know how you feel and apparently a lot of them did. so the speech was effective in that sense. i have to disagree slightly with ezra, he gave a great speech for a policy of a few months ago or up to last week that is no longer where the ball game is and the president slipped into the speech the fact that he's now in favor of the senate plan that is the harry reid plan which also contains no revenues in it. so after giving a whole speech about the balanced approach that he supposedly is for, the fact is what the white house is supporting now in a last-ditch effort to do something other than what the republicans want to do that would require another circus like this six months from now is a cut only plan that

would though take the debt ceiling debate past the 2012 election. the president didn't dare explain that in any detail because it would undercut everything else he just said and it also would further infuriate the left wing of his own party. that completely mystified me. >> ezra, let's go to that. the reid plan it seems to me is a perfect one for calling the republicans' bluff if nothing else because it does do as howard said, the dollar for dollar exchange on debt ceiling increase with spending cuts and spending cuts only, no uncomfortable tax revenue increase for republicans and republicans are opposing it. >> yes, howard is right, by the way, the president did endorse the reid plan and arguing for revenues after he said he would be okay with the cuts only bill. 1.2 trillion in discretionary cuts and winding down the wars

and mandatory spending cuts and super committee to cut spending. it's oddly enough similar to the first boehner plan. it's designed to call the republican bluff. it's dollar for dollar, beyond the limit you need to raise the debt ceiling and the hope you can show republicans won't go there, only because they refuse to raise the debt ceiling without cutting medicare. >> can i say, that's the speech the president should have given tonight. i hate to be a monday night quarterback, but, look, they're clearly -- if he's not willing to support the reid plan which has no revenue raisers in it and they're saying no, then clearly the only reason that they want to say no is that they want to do this again in six months and he should have said that. >> howard and ezra, thank you, howard, you were hired as a monday night quarterback. that's why we want you there. thank you both very much. >> a